Introduced Version
HOUSE BILL No. 1033
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 22-4.
Synopsis: Professional employer organizations. Provides that, for
purposes of the unemployment compensation system law, a
professional employer organization (PEO): (1) that enters into a
professional employer agreement is not treated as a successor employer
or as receiving a transfer of a trade or business; (2) that elects to use the
PEO level reporting method is liable for contributions, interest,
penalties, and surcharges for the duration of a professional employer
agreement unless the PEO elects to change to the client level reporting
method; and (3) is permitted to apply certain wages to the maximum
amount of wages that are subject to contributions to the system.
Provides that certain changes in a PEO relationship do not make a
client a successor employer. Provides that a PEO that has made an
election to use the client level reporting method may file a request for
clearance with the department of workforce development.
Effective: July 1, 2022.
Torr
January 4, 2022, read first time and referred to Committee on Employment, Labor and
Pensions.
2022 IN 1033—LS 6326/DI 141 Introduced
Second Regular Session of the 122nd General Assembly (2022)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
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provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2021 Regular Session of the General Assembly.
HOUSE BILL No. 1033
A BILL FOR AN ACT to amend the Indiana Code concerning labor
and safety.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 22-4-6.5-10, AS AMENDED BY P.L.122-2019,
2 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2022]: Sec. 10. (a) The following apply to a PEO that elects
4 to use the PEO level reporting method:
5 (1) The PEO shall file all quarterly reports in accordance with
6 IC 22-4-10-1.
7 (2) Whenever the PEO enters into a professional employer
8 agreement with a client, the PEO
9 (A) shall notify the department not later than fifteen (15) days
10 after the end of the quarter in which the professional employer
11 agreement became effective. and
12 (B) is subject to IC 22-4-10-6 and IC 22-4-11.5, beginning on
13 the effective date of the professional employer agreement.
14 (3) The PEO shall notify the department in the form and manner
15 prescribed by the department not later than fifteen (15) days after
16 the date of the following:
17 (A) The PEO and a client terminate a professional employer
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1 agreement.
2 (B) The PEO elects the client level reporting method under
3 section 11 of this chapter.
4 After receiving a notice under this subdivision, the department
5 shall make any changes required by IC 22-4-10-6 and
6 IC 22-4-11.5.
7 (b) Except as provided by IC 22-4-32-21(d), A PEO that elects to
8 use the PEO level reporting method is liable for all contributions,
9 interest, penalties, and surcharges for the duration of a professional
10 employer agreement or until the effective date of an election under
11 section 11 of this chapter by the PEO to change to the client level
12 reporting method.
13 (c) A PEO is not, as a result of entering into a professional
14 employer agreement with a client, considered to be a successor
15 employer under IC 22-4-10-6. A PEO's act of entering into a
16 professional employer agreement with a client does not constitute
17 a transfer of all or part of a trade or business under IC 22-4-11.5-7.
18 (d) A client of a PEO is not, as a result of:
19 (1) entering into a professional employer agreement; or
20 (2) terminating a professional employer agreement;
21 with the PEO, considered to be a successor employer under
22 IC 22-4-10-6 or IC 22-4-11.5-7.
23 (e) A PEO, in a calendar year during which the PEO enters into
24 a professional employer agreement with a client, may apply any
25 wages paid to a covered employee in that calendar year by the
26 client or by another PEO on behalf of that client under a
27 professional employer agreement with that client toward the
28 maximum amount of the taxable wages established under
29 IC 22-4-4-2(b).
30 (f) Upon termination of a professional employer agreement
31 between a PEO and a client, the client shall be treated as a new
32 employer unless the client is otherwise eligible to retain the
33 experience account balance, liabilities, and wage credits.
34 SECTION 2. IC 22-4-6.5-13, AS ADDED BY P.L.33-2013,
35 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
36 JULY 1, 2022]: Sec. 13. (a) A client that transfers between PEOs is
37 Upon termination of a client's professional employer agreement
38 with a PEO, followed by the immediate initiation of a professional
39 employer agreement with another, not commonly owned, managed,
40 or controlled PEO, the subsequent PEO and client are not subject
41 to IC 22-4-10-6 and IC 22-4-11.5. whenever:
42 (1) the PEOs are not commonly owned, managed, or controlled;
2022 IN 1033—LS 6326/DI 141 3
1 and
2 (2) both PEOs have elected to use the PEO level reporting
3 method.
4 (b) The client of a PEO that has elected to use the client level
5 reporting method may elect to become liable for payments in lieu of
6 contributions (as defined in IC 22-4-2-32) whenever:
7 (1) the client is otherwise eligible to make the election; and
8 (2) the requirements of IC 22-4-10-1 are met.
9 SECTION 3. IC 22-4-32-21, AS AMENDED BY P.L.122-2019,
10 SECTION 45, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
11 JULY 1, 2022]: Sec. 21. (a) Any individual, group of individuals, or
12 other legal entity, whether or not an employing unit which acquires all
13 or part of the organization, trade, or business within this state of an
14 employer or which acquires all or part of the assets of the organization,
15 trade or business, shall notify the commissioner in the form and manner
16 prescribed by the department not later than five (5) days prior to the
17 acquisition.
18 (b) Unless the notice is given, the commissioner shall have the right
19 to proceed against either the predecessor or successor, in personam or
20 in rem, for the collection of contributions and interest due or accrued
21 and unpaid by the predecessor, as of the date of the acquisition, and the
22 amount of the liability shall, in addition, be a lien against the property
23 or assets so acquired which shall be prior to all other liens. However,
24 the lien shall not be valid as against one who acquires from the
25 successor any interest in the property or assets in good faith, for value
26 and without notice of the lien.
27 (c) On request in the form and manner prescribed by the department
28 after the acquisition is completed, the commissioner shall furnish the
29 successor with a statement of the amount of contributions and interest
30 due or accrued and unpaid by the predecessor as of the date of the
31 acquisition, and the liability of the successor and the amount of the lien
32 shall in no event exceed the reasonable value of the property or assets
33 acquired by the successor from the predecessor or the amount disclosed
34 by the statement, whichever is the lesser.
35 (d) An acquirer described in subsection (a) or a professional
36 employer organization that has made an election under IC 22-4-6.5
37 IC 22-4-6.5-11 may file a request for clearance in the form and manner
38 prescribed by the department at least five (5) business days before an
39 acquisition or transfer. After filing a request, the acquirer or
40 professional employer organization is entitled to receive a statement
41 indicating whether an account being acquired or transferred is in good
42 standing with the department as of the date of the transfer. If the
2022 IN 1033—LS 6326/DI 141 4
1 statement shows that the account that is being acquired or transferred
2 is in good standing with the department at the time of the transfer, and
3 the department later discovers an outstanding liability associated with
4 the acquired or transferred account, the department:
5 (1) may not assess a delinquent employer rate modification under
6 IC 22-4-11-2 based on the account for which a statement was
7 made under this subsection; and
8 (2) in the case of a PEO that has made an election under
9 IC 22-4-6.5-11, shall administratively separate the acquired or
10 transferred client account from the PEO until the liability is
11 recovered.
12 (e) The remedies prescribed by this section are in addition to all
13 other existing remedies against the predecessor or successor.
2022 IN 1033—LS 6326/DI 141